This business plan is intended solely for informational purposes to assist in determining if you with a due-diligence investigation of this project. The information contained herein is believed to be reliable, but the management team makes no representations or warranties with respect to this information. The financial projections that are part of this plan represent estimates based on extensive research and on assumptions considered reasonable, but they are of course not guaranteed. The contents of this plan are confidential and are not to be reproduced with express written consent.
Furniture™ is a new company in the Arabian market that deals with the cosmetic restoration of wooden furniture. For clients, saving money when they want to refurbish furniture is often the primary concern. Buying new furniture can be expensive, and Furniture™ covers the need for savings perfectly, as it carries out restoration work to create the aesthetic appeal of outdated furniture.
Service Description. Furniture™ supplies a full-cycle service, including self-transporting old furniture to the warehouse, colouring the wood to meet the client’s exacting specifications, and returning the refurbished and visually appealing furniture.
Marketing and Sales. Furniture™ has a competitive advantage in that it ensures extensive customer involvement in the customisation process, does not create inconvenience at home by carrying out colouring in stock and publishes prices on its official website. The company plans to use social media to promote the brand actively, and a transparent pricing strategy makes upgrading old furniture more economical than buying new. The market is represented by solid competition due to a low entry threshold.
Development. Furniture™ aims to continue to grow by expanding its workforce and production capacity. Over the next five years, the company will increase the number of employees, introduce a new organisational culture, and consider options for entering new markets.
Operations. Furniture™ will ensure constant customer communication. The company buys consumables wholesale and sells services through virtual platforms or by phone. Operational processes aim to achieve a sustainable and environmentally responsible brand image in the face of Furniture™.
Management. In the initial stages, Furniture™ plans leadership as a director but plans to hire additional managers responsible for departments as the staff expands.
Financial Summary. The financial outlook shows an increase in the company’s net income over five years, current assets and capitalisation growth. AED 450,000 is required over the first two years, and then Furniture™ will return to the investor up to 114% over five years. The company shows losses in the first two years but has been in the black since the third year.
Offering. Furniture™ plans to borrow money from a venture capital fund and return it to the investor over five years as 12% of annual sales. The projection shows the brand’s investment appeal by increasing the size of its current capitalisation. When Furniture™ experiences growth, it considers opportunities for further expansion.
Furniture™ is a new company in the Arabian market dedicated to the cosmetic restoration of old furniture. The company is at the first stage of evolutionary development. The company is headquartered in Dubai. An analysis of the Dubai industry market shows that the company’s goals are promising, as many local companies and social platforms engage in selling obsolete furniture (Dubai used furniture market, 2022; FA, 2021). Furniture™ focuses on work built on the desires and requirements of the client to change the appearance of old furniture.
Seeing a chance to create a sustainable environmental agenda, Furniture™ aims to create a market environment in which the restoration and refurbishment of obsolete furniture design aesthetic and functional appeal in customers’ perception, supporting the critical socio-economic and environmental trends of the UAE’s population.
History and Current Status
Furniture™ is in the early stages of development. The organisational details of the business, including financial budgeting, strategic vision and company culture, are being actively worked out for successful commercial development.
Markets and Products
Furniture™ will meet the market needs of customers who do not seek to buy new furniture for financial or any other reasons but who desire to update the appearance of their furniture items. The structure of the company’s target customers should be divided into two sectors: b2b and b2c (Rėklaitis and Pilelienė, 2019). The primary consumers of Furniture™’s services are people who have decided to give their old furniture a new, visually appealing look, an example of which is shown in Figure 1. Specific examples of this audience could be older consumers, people interested in the adequate use of resources, and customers with insufficient savings. On the other hand, the audience for this business could be companies that buy old furniture and recycle it or sell it on the secondary market (FA, 2021). Thus, it can be summarised that Furniture™’s primary services at the initial stage of development are the cosmetic restoration of any wooden furniture. Furniture™ does not intend to work with other non-wood furniture items or provide functional repair services.
The aims of Furniture™ include:
- Entering the industry market as a small sustainable business company
- Attracting investment and consumer appeal through the proper marketing
- Stimulating business growth and increasing profits
- Expanding services and hiring new employees while continuing to grow.
Product or Service description
This section provides a detailed analysis of the proposed service. In addition, the section provides valuable information about the market structure and conducts a competitive and SWOT analysis.
Furniture™ provides decorative restoration services for old furniture. The company’s services include the ability to come and pick up furniture directly from the customer’s home or office, paint it in the warehouse and return it to the customer.
Umar Abdullah provides extensive services for the decorative restoration of furniture but does not indicate the possibility of working closely with the client in choosing the appearance of the restored furniture (UATECHUAE, 2021). In addition, the visual part of the company’s website is unattractive (Figure 2), which may create a rejection in the perception of potential customers (Bilro, Loureiro, and Ali, 2018). A larger competitor is HomeGenie: the company provides recruitment services for specific client tasks (HomeGenie, 2022). HomeGenie has a convenient and attractive search by city, term, budget and type of task to be performed. However, in this case, the customer must pay a higher fee, as part of the budget goes to the middleman’s commission. In addition, as HomeGenie is essentially an aggregator, its responsibility for fulfilling the order is minimal.
As a result of Porter 5F’s analysis (Fig. 3), Furniture™ can be seen as a company that does not provide exceptional service, is relatively easy to deal with and can find substitute suppliers in critical circumstances, and requires sensitivity in communication with customers (Scott, 2020).
Figure 4 illustrates the results of the SWOT analysis: as can be seen, the business has a significant number of strengths that qualitatively differentiate Furniture™ from its competitors. However, the business also has several competitive weaknesses Opportunities include ways to expand further, while threats include fierce competition in the marketplace and the possibility of political regulation of private enterprise.
Stage of Development
In terms of the organisational development cycle, the company is at the start-up stage, which means it is still waiting for revenue and profit growth (Dempsey, 2018). There is an obstacle in this case, as Furniture™ needs to be invested initially to get the necessary and sufficient funding required for further development, so venture capital investment rounds will be tried to minimise the risks and obtain the necessary and sufficient funding for further development.
Industry and Marketplace Analysis
The market analysis shows a deficit in the existence of a company that could meet customers’ needs.
The market analysis shows a deficit in the existence of a company that could meet customers’ needs. The chosen industry to compete in is the recycled furniture market in Dubai. Outdated furniture is often discarded or replaced with new furniture, although there are cheaper options for refurbishing furniture items, namely decorative upholstery. It is reported that Dubai is characterised by a considerable amount of old furniture ending up in landfills (Khaleel, 2019). According to NAICS, the relevant code for this industry is 811420 (NAICS, 2022). Segmentation of the industry is based on customer needs — the market should initially be segmented into consumers as individuals and as companies. A Google search gives major players several options, including HomeGenie and Rainbow Powder Coatings. International relationships can affect the supply of paint products. Thus, there are optimistic forecasts for growth, given the current agenda.
Based on current trends, the market is in a growth phase. There are no significant players in the sector market, which forms an easy entry threshold and increases competition.
Market. The restoration market in Dubai is small, with only a few mid-sized companies and private specialists providing technical contracting services. The SIC code for this market is 7641 (USDL, 2022).
Market trends. The market for cosmetic restoration of wooden furniture is growing as the amount of discarded furniture increases, and socio-economic policies worldwide become more complex. Instead of buying new furniture, they may turn their attention to cosmetic restoration, which is the reason for the market’s growth. A review of competitors’ offerings reveals a lack of trends in customising furniture pieces, which creates a scarce supply. Furniture™ plans to make up for this deficit with active marketing that influences the consumer’s perception of the organisation, taking into account the broad interests of the customer.
There are two types of direct customers for Furniture™, including individuals and business companies selling refurbished old furniture. The section presents the detailed characteristics of these clients.
Direct Customers. Customers are individuals and companies interested in restoring old furniture. Individuals as clients are anyone who does not want to throw out old furniture for economic or personal reasons and is willing to pay for cosmetic restoration instead (DAN, 2019). Age, profession and gender do not play a role in this regard, as restoration benefits young people and adults of all genders and professions. Socio-economic status is also ambiguous: for low-income clients, restoration is a means of saving money; for wealthy clients, it is a way to restore valuable pieces of furniture to their aesthetic appeal. Business customers are companies that market antique furniture that has lost its external appeal. This industry is of the restoration and antique type (NAICS: 453310), and the location of business clients is not essential as they can sell restored goods domestically and in foreign markets. The size of the market is not reported.
There are only direct competitors for Furniture™ so far, with three companies discussed in the section. Notably, none of the competitors publishes prices for services, as this is an individual calculation.
Direct competitors. Direct competitors include companies in the Dubai market that provide similar services. These include HomeGenie, Rainbow Powder Coatings and Umar Abdullah, medium- to small-sized companies. Rainbow Powder Coatings and Umar Abdullah deal directly with painting outdated furniture, while HomeGenie is an aggregator that finds a specialist by user requirements. The direct competitors do not give a final production price, as it depends on the furniture’s individual features and scope of work. Notably, each company does not work exclusively with painting furniture. The services are distributed online via official websites.
Furniture™’s marketing strategy is to cover the critical unmet needs of target consumers and create a sustainable brand image responsive to customer interests and needs.
Target Market Strategy
Unmet customer needs are the lack of freely available pricing, the lack of a specific portfolio, and the lack of a niche company that only restores decorative wooden furniture but does not offer this as one of its next services: Furniture™ meets these needs. A niche orientation helps customers identify that the company is strong in this service, which increases trust (Papista and Dimitriadis, 2019). The market segment for orientation is all Dubai residents who tend to explore websites for cosmetic restoration or buying new furniture. As evidence, the growing trend of throwing out old furniture among Dubai residents should be pointed out (Khaleel, 2019). With proper marketing and operational efficiency, Furniture™ can capture a significant market share. The positioning is to create the image of a niche, environmentally friendly company that solves specific customer needs and provides a wide range of options for customisation.
Developing the service niche and eco-friendly will cover customers’ needs to use quality services. At the same time, Furniture™ will openly declare its prices on the official website, solving the need for pricing analysis and ensuring transparency (Setiawan et al., 2020). The company also plans to post pictures of the work done on the website and social media so that the customer has a chance to examine them before contacting Furniture™. The service features described qualitatively differentiate Furniture™ from competitive offerings, which encourages the investment of customer confidence in the company.
The pricing strategy is based on the specific furniture the client plans to refurbish. The website will provide information on each piece of furniture and include prices. Figure 5 shows a simple example calculation for a wooden chair that takes half an hour to paint and about 15 dirhams for paint and varnish, based on the average size of the chair. Turning the IKEA example shows that an average wooden chair costs 1.7 times as much.
The service is provided in the warehouse: Furniture™ arrives at the client’s premises and picks up the furniture, takes it to the warehouse and refurbishes it, and then returns the finished product to the client’s home. In this case, the customer does not have to worry about transport problems or possible home contamination, as Furniture™ deals with these issues completely, unlike its competitors.
Advertising and Promotion Strategy
Advertising channels include the website and social media. Users use social media to explore the service so that active posting will increase their engagement (Scolere, Pruchniewska, and Duffy, 2018). In addition, targeting advertising to search engines is set up, hence, the client is aware of the services when keywords are requested. For the work of word of mouth, business cards are used, which Furniture™ leaves to clients after completion of the work.
Sales are made through the website and social media, where customers can book a specific date and time. Customers can also contact Furniture™ in person at the telephone number listed on the website to discuss details. A separate sales office is not envisaged at the first stage of the company’s development, as it is expected that face-to-face communication with customers by specialists and PR staff will suffice.
Marketing and Sales Forecasts
Figure 7 shows the results of 4P’s analysis for Furniture™. Based on these results, Furniture™ is expected to achieve excellent marketing and sales performance and capture a larger share of the Dubai market.
Operations in Furniture™ are designed to increase brand appeal in users’ perception. A minimum of hiring is required, sufficient to maintain operational efficiency.
The operational strategy is to hire staff responsible for maintaining social media and publishing engaging content. The PR staff will additionally have to communicate with customers and transfer them to a website where they can conveniently book a date for reupholstering. In addition, operational appeal includes complete furniture transportation services, which also creates convenience for the customer. Thus, the key factors that characterise flexibility, efficiency and quality are transparency, creating a sustainable brand image and investing in customer convenience.
Scope of Operations
Cosmetic restoration, transportation and customer communication are handled through Furniture™ resources, while consumables are purchased from wholesale and retail shops, including online. Restoration specialists, managers, drivers and PR staff are required for recruitment.
The company has office hours (10 a.m. to 9 p.m.), during which it takes orders and communicates with customers. Furniture™ is open all year round, with no weekends, which increases opportunities for customer engagement.
Operating expenses include the cost of consumables, staff salaries, rent for warehouse maintenance and utilities, fueling the truck, and targeted advertising costs.
The company is expected to grow steadily over the next few years with its workforce and production capacity expansion. Furniture™ plans to use innovation and change as paradigms to improve operational efficiency continuously.
Operational efficiencies must be secured, namely hiring Furniture™ staff, renting a warehouse and creating customer catalogues. There are risks that operational costs will prove excessive and cannot be covered within the first five years: careful budgeting is a strategy to minimise these risks.
Development costs include the intensive costs of hiring employees and rental costs in the first year of Furniture™’s operations and, after that, the costs associated with expanding staff, increasing production capacity, and introducing new services, if relevant, as well as the cost of hiring an audit.
The organisational structure is built on a vertical hierarchy and includes scope for expansion of the model over the next five years.
There will be a vertical hierarchy in the Furniture™ structure, with the director managing global organisational issues. A detailed model of the organisational structure in the early stages of Furniture™’s evolution is shown in Figure 9.
Management in the company in the first stages is carried out by the company director, both the founder and the visionary. Although expansion through hiring managers for a specific department is expected in the future — approximately five years — this is not needed at the beginning of the commercial journey. The company is not public, so the director’s profit is calculated as a share (10%) of the company’s total profits. The director conducts organisational management and decides on global issues for the company.
Administrative costs include salaries for employees and the director and bonus compensation as a motivational incentive for employees.
Summary of Financials
The main financial statements are shown in the Appendix. This section briefly explains the details of financial forecasting and points to long-term development paths.
The appendix shows the tables — assumptions include an increase in the number of employees, inflationary costs affecting the cost of consumables, a personal income tax rate of 12.5%, an increase in sales, an investor commission of 12% of the total annual profit, and an increase in repair needs as the machinery wears out.
Based on the tables in the appendix, sales growth and an increase in assets are expected for the company, combined with an increase in liabilities caused by loans for expansion and the payment of a share of profits to the investor. If, by the following year, there was a drop in net income and an increase in costs, the business was projected to expand that year.
AED 300,000 is projected to be required in early 2023 and an additional AED 150,000 by 2024 to be spent on building out Furniture™’s organisational system. No other capital injection is required over the next five years, but expansion may require additional investment if the company’s net profits are insufficient.
Risks are related to the threat of not making a profit, which would make Furniture™ less attractive to investors. In this case, the investor’s capital invested would be uncovered, and the company would incur losses and file for bankruptcy. For this reason, a sensible strategy is not to pay an investor a specific amount after five years but to pay a percentage of profits every year so that the investor is sure to get their money’s worth.
The company does not seek to go public but instead wants to remain niche and exclusive to the industry market. Therefore, the exit strategy is to continue operating and expanding until the company can reach other markets in the UAE. If the projections prove wrong, however, Furniture™ will have to file for bankruptcy.
The deal is structured as a loan of finance from the venture capitalist and a payment of 12% of annual sales over five years, allowing the investor to achieve a 114% return on investment; otherwise exit strategies are proposed.
The launch of Furniture™ requires AED 300,000 by early 2023 and AED 150,000 for equipment and administrative costs. The money is expected to come from venture capitalists who receive 12% of annual sales.
Valuation of Business
The company’s capitalisation is calculated according to the Balance Sheet, which is the value of all the company’s assets minus the sum of all liabilities. As the Balance Sheet shows, the company’s current capitalisation tends to increase over five years but can fall if Furniture™ actively pays off debt to the investor when the number of sales increases.
Furniture™ plans to generate up to AED 450,000 in the first two years and give AED 512,784 to the venture capitalist within five years. The investor’s return on investment would then be 114%. If the projection is successful, the investor will receive this money, but in case of bankruptcy, the director of Furniture™ will have to seek debt funds to recoup the investment. The exit strategy for the investor is to terminate the deal with Furniture™ and demand repayment of the remaining amount before the level of investment is reached.
Bilro, R.G., Loureiro, S.M.C. and Ali, F. (2018) ‘The role of website stimuli of experience on engagement and brand advocacy’, Journal of Hospitality and Tourism Technology, 9(2), pp. 204-222.
DAN (2019) 3 benefits to having your old furniture restored. Web.
Dempsey, B. (2018) Business life cycle spectrum: where are you? Web.
Dubai used furniture market (2022) Web.
FA (2021) Where to find used furniture for sale in Dubai on a budget. Web.
HomeGenie (2022) Give a new look to your furniture! Web.
IKEA (2022) Showing results for “chair”. Web.
Khaleel, Z. (2019) What happens to used furniture in the UAE. Web.
NAICS (2022) NAICS code description. Web.
Papista, E. and Dimitriadis, S. (2019) ‘Consumer–green brand relationships: revisiting benefits, relationship quality and outcomes’, Journal of Product & Brand Management, 28(2), pp. 166-187.
Rėklaitis, K. and Pilelienė, L. (2019) ‘Principle differences between B2B and B2C marketing communication processes’, Organizacijø Vadyba: Sisteminiai Tyrimai, 1(81), pp. 73-86.
Scolere, L., Pruchniewska, U. and Duffy, B.E. (2018) ‘Constructing the platform-specific self-brand: the labour of social media promotion’, Social Media + Society, 4(3), pp. 1-11.
Scott, G. (2020) Porter’s 5 forces. Web.
Setiawan, R., et al. (2020) References for shopping online versus in stores what do customers prefer and how do offline retailers cope with it? Web.
UATECHUAE (2021) UMAR ABDULLAH interior design & fitout company. Web.
USDL (2022) Description for 7641: reupholstery and furniture repair. Web.
Income Statement [5 years]
Balance Sheets and Ratio Analysis [5 years]
Cash Flow Statements [5 years]